Factors Affecting the Listing of Small Businesses on the Lusaka Securities Exchange Alternative Market in Zambia

Abstract

Small and Medium Enterprises (SMEs) are vital to Zambia's economy, contributing significantly to GDP, employment, and business activity. Despite the launch of the Lusaka Securities Exchange Alternative Market (LuSE Alt-M) in 2015 to address SME financing gaps, no SMEs have listed on the platform. This study investigates the factors that hinder SME participation in LuSE Alt-M. The study employs a mixed-methods approach. Data was collected through questionnaires targeting key stakeholders, including regulators and financial institutions. Descriptive and thematic analyses revealed significant barriers to listing, with low awareness and inadequate financial literacy emerging as the most critical challenges. Although SMEs generally recognize the potential benefits of equity financing, misconceptions about ownership loss and procedural complexities deter participation. Key findings suggest that simplified listing processes, targeted financial literacy programs, and enhanced marketing efforts are essential to improve SME engagement with LuSE Alt-M. The study recommends initiatives such as mentorship programs, sector-specific incentives, and digital outreach to increase awareness and accessibility. Strengthening collaborations between stakeholders, such as regulators, financial institutions, and business incubators/accelerators, is also crucial to building a supportive ecosystem for SME growth and market participation.